30-SOMETHINGS SWEAT RETIREMENT: PART 2

Those in their late 30s today are more worried about retirement than those in the Baby Boom Generation, which is retiring, or on the verge of retiring, now.
A Pew Research Center survey, as reported by Hope Yen of The Associated Press, says that about 49 percent of those between 35 and 44 said they had little or no confidence that they will have enough money for retirement.
As discussed last week, time is on your side if you are in this group. There are steps you can take to stave off disaster. We talked about presuming your job will change and presuming any pension promises made to you will be broken. If neither happens, and you prepared for the worst, it’s a bonus for you.
But there are two other areas about which you should think if you are in this age group, and are worried about retirement.
Your spending habits. We talked last week about the “need” to keep up with all the latest technology. Do your gadgets last you a long time, or are you constantly trading up for the newest stuff? If something works for you, even though it may be “old” technology, sticking with it may help your retirement. The money you’d spend on upgrades will be more useful working for you so you can retire on your terms.
COFFEE: A RETIREMENT BOOSTER?
But there are other spending habits to think about. Lots of folks like Starbucks, or other premium-priced coffee. When your grandparents or parents were your age, coffee was coffee. It might have cost a dime in your grandparents’ day, and up to 50 cents in your parents’ youth. For that dime, or half-buck, that you spent in a coffee shop, you got all the coffee you wanted. Unlimited refills were yours. Today, you pay $2 for a cup of coffee. Many places still give you unlimited refills, but that idea is trending out. Starbucks never gives free refills. Other places are charging, say, 50 cents for every refill. Sure, the coffee shops and restaurants need to make a living, but a cup of coffee a day from a shop can add up to real money over a year. Do the math: $2, multiplied by, 250 workdays (5 days a week over 50 weeks) is $500. Put $500 a year into your retirement account starting at age 35, and if you work until you are 65 (30 years) is $15,000 in contributions over that time.
Say those contributions that money doubled every 10 years in your retirement account. In the first 10 years, $5,000 in contributions doubled to $10,000. That $10,000, plus the second 10-year contributions of $5,000, doubled becomes $30,000. That $30,000, plus $5,000 in contributions, doubles to $70,000. That’s not much for a retirement nest egg, but you augmented your nest egg by that amount, just by skipping the daily cup of coffee on the way to work.
Remember, your grandparents made a pot of coffee at home before work, and put it into a Thermos that kept it hot all day. You could buy your own bags of whatever coffee you like, and try putting it into a Thermos. Sure, it’s a pain in the neck to carry a Thermos, and your friends may laugh, but you may have the last laugh at retirement.
Finally, your free time. We all love free time to watch TV, play sports, enjoy our families etc. But what if you took some of that free time to work on your fortune? Retirement would not only not be an issue, you might even be able to retire VERY YOUNG! There are many ways to leverage your time into activities that could produce a lifetime, residual income. To check out one of the best ways, visit www.bign.com/pbilodeau. It’s thinking outside the box, but if you are still young, and fretting about retirement, you have to think of alternatives you’d never thought of before.
It used to be risky to start a business. But today, starting a business appears less risky than trying to keep a good job for 30 or 40 years. If you can keep your regular job for as long as you can, and start a business on the side, you may have the best of all worlds.
This is not your grandfather’s, or your father’s, job market. Like the gadgets we like, jobs change. Companies are finding ways to hire fewer people, no matter the skill level. Pensions are changing. The defined-benefit pensions, paid for entirely by the employer, are disappearing quickly. Employees have to contribute toward their own retirement.
If you are between 35 and 44 years old, you have time. Little changes in how you live and work could make the difference in when and how you retire. Let your friends laugh at you. Retirement planning is no laughing matter. For if you do what you can for you, you’ll have the last laugh.
Peter

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